China should not hesitate on North Korea

Beijing shows lack of diplomatic imagination

by John Nugée in London

Thu 27 Apr 2017

It is a feature of the news cycle that even serious crises are quickly overtaken by other stories. A week ago North Korea occupied all the headlines, as the world seemed closer to nuclear conflict than at any time since the 1962 Cuban crisis. But the flares did not go up, and new stories – the first round of the French presidential elections, the calling of a general election in the UK, further terrorist attacks in Europe – have pushed Pyongyang and its bouffant leader, Kim Jong-Un, off the front page.

But it is unwise to consign the warhead-sized scare to the archives. Though the experience doesn't teach us anything new about North Korea or President Donald Trump, it does reveal more about China and President Xi Jinping.

North Korea poses danger for Beijing. It is an unpredictable country, and miscalculation in Pyongyang could result in any number of unpalatable outcomes for China. These range from a refugee crisis on its northern border measured in millions, to a reunified Korea in the sphere of western influence, and the threat of nuclear war.

China's strategy to this point has been to keep North Korea stable and functioning, in the hope that this will delay its collapse, while claiming it has some diplomatic leverage over Kim and must be allowed to handle things its own way.

There are some diplomatic problems that countries can decide to do nothing on and leave to successors. For both China and the US, resolving the status of Taiwan is one such example. Everyone understands that it is a de facto independent country and that Beijing's 'One China' policy is a polite fiction. It is in no one’s best interest to address the matter right now.

For both China and the US, North Korea looked like a similar case of 'do nothing and eventually the issue will resolve itself', probably with the regime collapsing under the weight of its military expenditure. This appeared to be a suitable plan until one factors in that Pyongyang will soon (or perhaps already does) have the means to deliver a nuclear strike on Japan, and may have the power to strike the US in the not too distant future. No US president can ignore these urgent threats.

China is not making use of this understandable US anxiety. Washington may be prepared to grant any number of concessions to Beijing in exchange for China eliminating the North Korean nuclear threat. This could include the removal of all US forces in South Korea, or the cancellation of the defence pact with Taiwan. Beijing may be able to negotiate recognition of its territorial claims in the South China Sea. The US could pay inordinately large sums of money to China to (nominally) 'help pay for the refugee crisis when the regime fails'. Trump – a self-proclaimed deal-maker – is the ideal person for China to try this with. After a number of policy failures in his young presidency, Trump needs a 'success story'.

In doing nothing, Beijing shows that it is yet to understand that diplomacy means knowing both when to stand fast and when to act decisively. If China waits until it is indisputably the richest and most powerful nation on earth, it risks wasting years during which time it could manoeuvre into better strategic positions.

It is doubtful that Beijing will have a better chance to get what it wants from Washington. That China’s leaders are not trying reveals a lack of confidence in their negotiating strength and absence of diplomatic imagination.

John Nugée is a Director of OMFIF and a former Chief Manager of Reserves at the Bank of England.